Small Business Employee Benefits and HR Blog

How Do I Buy Health Insurance for My Small Business?

Starting and building a successful business is hard work, and one of the big unknowns is how and if you’ll be able to provide health insurance for yourself and employees.

Even with new small business health insurance options, small businesses face unique challenges when it comes to finding health insurance. As of 2014, health care reform provides small businesses with new opportunities to offer affordable health insurance coverage.

Here are some key factors to consider as you consider buying health insurance for your small business.

Understand Your Health Insurance Options

In the last few years, new small business health insurance options have become available. As your small business evaluates health insurance options, there are two core options for contributing to employees' health benefits:

Types of Health Insurance

To understand how these two options work, it is important to understand the two main types of health insurance: individual health insurance and group health insurance.

1) Individual Health Insurance

Individual health insurance plans are policies an individual purchases to cover themselves and/or their family - just like car insurance. Anyone can apply for individual health insurance, and they typically cost 20% less than group health insurance premiums. Small business owners who cannot offer group coverage due minimum contribution (cost), or minimum participation requirements, typically purchase individual and family plans for themselves and their families.

As of 2014, insurance companies can no longer decline individuals for individual health insurance based on a pre-existing medical condition. Also, as of 2014, there are new tax subsidies available to individuals who purchase individual health insurance on the state Exchanges. In some cases, self-employed persons who purchase their own health insurance may be able to deduct the cost of their monthly premiums.

Group health insurance plans are a form of employer-sponsored health coverage. Costs are typically shared between the employer and the employee, and coverage may also be extended to dependents. In certain states, self-employed persons without other employees may qualify for group health insurance plans. With group health insurance, the employer selects the plan (or plans) to offer to employees.

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Disclaimer: The information provided on this website is general in nature and does not apply to any specific U.S. state except where noted. Health insurance regulations differ in each state. See a licensed agent for detailed information on your state. PeopleKeep, Inc., does not sell health insurance.